The Canadian economy showed no growth in August and is expected to contract in the third quarter, reinforcing predictions that the Bank of Canada will not raise interest rates. Economists warn that the country is on the brink of a recession.
The federal agency released its August gross domestic product report on Tuesday, which shows the Canadian economy remained flat in the month. Meanwhile, a preliminary estimate is tracking a small contraction in the third quarter.
For the third quarter, Statistics Canada's preliminary estimate suggested the economy shrank at an annualized rate of 0.1 per cent, which would follow a contraction in the second quarter. A recession is often associated with layoffs and a rise in unemployment as business conditions worsen. Grantham says CIBC expects the job growth to be sluggish and to trail population growth. However, layoffs have been uneven across sectors so far, he said.
The report says higher interest rates, inflation, forest fires and drought conditions continued to weigh on the economy.
Canada Economy Growth Contraction Recession Interest Rates Bank Of Canada
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